1. Articles for Beverly Hills Times
by Craig Taggart
2009
There are many options to choose from when it comes to selecting a strategy in managing
wealth. Truly effective wealth management begins by taking charge of the process early in
life before there are sustainable assets such as excess cash, stocks or bonds. Having a longer
time horizon with these financial assets will assist in overcoming the costs, fees and
economic forces (such as inflation or our current recession) from eroding your wealth. This
is why 2009 is vitally important for families and wealthy individuals to take a disciplined
approach to this process and protect that which they’ve been working toward for years. We
must view 2008 as a lesson insofar as many people in this country were simply not
prepared, focused or diversified in their overall approach to having a proven wealth
management strategy for multiple generations. Individuals and families should measure
financial performance on the basis of overall investment return. A timeline should also be
established for a regular review of the investment advisor’s job performance as well as the
financial performance of investment portfolios, trusts, and other components of the family's
financial portfolio. Depending on the portfolio, a review should be done on a quarterly or
annual basis regarding the asset allocation or strategy diversification.
Diversification and focus combine the best of both worlds. Diversification achieves risk
mitigation, and with focus comes the intensity to succeed over the long term that many
need to prosper in life. The principle of diversification applies in other ways, with most
individuals having both taxable and tax-deferred (retirement and deferred compensation
plans) investment portfolios. Some have life insurance savings plans that are tax exempt
for the beneficiary and a select few also control corporations. Each of these entities receives
different tax treatment. Because tax rates don't all rise and fall at the same time, it makes
sense to diversify the tax treatment of your assets. Diversification needs to be allocated to
several areas, such as alternative investments, private equity, real estate, oil and gas, and
emerging markets.
At the core of this topic of wealth management is the discussion of asset protection and tax
minimization. These concepts are increasingly relevant as we hear more frequently about
the rich seemingly getting richer, while the poor seem to go in the opposite direction. The
wealthy utilize a company / trust structure to accomplish what is known as asset
protection. This allows these individuals to continue to accumulate wealth, just not in their
name. Not having this legal structure in place allows for exposure to creditors, and hard
earned wealth is left open and unprotected in the event of future economic crises.
As for 2009, we have seen and will continue to see a very low interest rate environment as
our economy struggles through the worst recession since The Great Depression.
Companies that have maintained strong balance sheets will continue to gain interest in the
corporate bond asset class as investors continue to seek out the quality yields and capital
protection that are not currently available in traditional savings accounts or certificates of
deposit. This is also the year that investors will permanently adopt a much stronger
awareness of where they are putting their money due to the continuing deterioration of the
banking system. In touching on the basics of wealth management, it is easy to see this is a
process that begins with education and patience. It is abundantly clear that further and

2. continuing education in financial management is necessary to begin the wealth
management process as early as possible. Simply put, when visiting a doctor we all want
the best; why would we think otherwise when it comes to our wealth?